Tuesday, November 3, 2009

Evidence that the sky is darkening once again with financial storm clouds is the sudden increase in bailouts. While a bailout is in itself disheartening and just the absolute wrong policy choice in general, what really hurts is that they are done so poorly. Failed bailed out companies are coming back for second and third rounds and the government is throwing additional good money after bad.

The Treasury will inject 25.5 billion pounds of capital into RBS, for a total of 45.5 billion pounds, making it the costliest bailout of any bank worldwide. The government will fund about a quarter of Lloyds’s 21 billion-pound fundraising. Both banks said they won’t pay cash bonuses to workers earning more than 39,000 pounds this year."

Eventually somebody will say something... somebody will do something and stop this madness... right?!

This can't go on. Right? How is all this supposed to work out later? This is some terrible math isn't it?

Evidence that the sky is darkening once again with financial storm clouds is the sudden increase in bailouts. While a bailout is in itself disheartening and just the absolute wrong policy choice in general, what really hurts is that they are done so poorly. Failed bailed out companies are coming back for second and third rounds and the government is throwing additional good money after bad.

The Treasury will inject 25.5 billion pounds of capital into RBS, for a total of 45.5 billion pounds, making it the costliest bailout of any bank worldwide. The government will fund about a quarter of Lloyds’s 21 billion-pound fundraising. Both banks said they won’t pay cash bonuses to workers earning more than 39,000 pounds this year."

Eventually somebody will say something... somebody will do something and stop this madness... right?!

This can't go on. Right? How is all this supposed to work out later? This is some terrible math isn't it?

Disclaimer

The Financial Ninja is a collection of my thoughts and opinions about current economic and market conditions. These are not buy and sell recommendations. Use your head and do your own research. This is a forum to stimulate discussion and debate.

About Me

I started trading during the tech bubble when I was still in high school. My trading has financed my education and I have since completed a BA in Economics and an MBA with a concentration in Finance. I have worked as both a proprietary equity and fixed income derivatives trader.